Draft Charter 6/22/93 - mdw

The steady commercialization and privatization of the Internet
forbodes the growth of ``electronic commerce'' to a much greater extent
than we see today.  The ability to do business over the Internet will
benefit the Internet community in several ways: many new and valuable
services will be available to the users of the Internet; it will drive
Internet growth to a large extent; it will foster market efficiency by
making it easier for small vendors to enter large markets and by
providing consumers with broader range of choice.  A lightweight
Internet infrastructure for conducting business will enable automated
transactions between Internet users and service providers ranging from
Dialog, IEEE Journal Abstracts and AP News to the Home Shopping Club
and L.L. Bean.

Today, by-and-large, the potential of the Internet to facilitate
commerce has yet to be tapped -- even by service providers whose
product is information delivered over the Internet.  Bills and checks
for online information services are delivered in most cases via the
camels and mules of the postal service.  Even where product selection
and delivery are automated, if the actual business transaction is
conducted via traditional means, much of the advantage of the
automated component has been lost.  The overall transaction is no
longer automated, and most of the burden of the non-automated paradigm
is retained.  Today it is certainly feasible to browse Al's Bait
Shop's catalogue via Gopher, but until you are able to complete the
transaction by clicking on the ``Buy Squid'' button as well, much of the
incentive for automating any aspect of the process is lost.  Moreover,
absent a common mechanism for completing transactions, Internet-based
commerce is likely to be entangled in a mesh of bilateral ad-hoc
mechanisms.

A common mechanism would have the following benefits:

1.  Convenience to Internet users.
      For example, a Gopher-like interface for identifying, selecting
      and purchasing products with the click of a button.

2.  Easier vendor access to broader markets.
      Vendors of commodity products can access the Internet community
      for the price of an Internet connection.

3.  Promote Internet growth
      This technology will make the Internet relevant in the daily
      lives of a much larger group of people.  Further, coupling
      Internet infrastructure to real business activities increases the
      chances that the infrastructure will be appropriately funded and
      maintained.

4.  Provides incentive for fully automated procurement and its benefits.
      An automated infrastructure can support a market that is as easily
      consumer-driven as provider-driven -- for example, a market where
      consumers can find products as easily as products can find them.

5.  Reduced paperwork and bureaucracy
      Enough said.

The purpose of this BOF is to explore community interest in pursuing a
definition of common protocols to support commerce on the Internet.
In particular, we feel it is important to focus discussion on
approaches with the following characteristics:

+ Scalable
    Cannot preclude business models because of mechanism's inability
    to scale.  Should scale as the number of network nodes, not
    ``connections''.

+ Independent of market/pricing policy
    Revenue-recovery aspects should not be specific to any particular
    policy.  Must be flexible enough to change with market-imposed
    changes to policies.  Strict tabulation of transactions do not
    necessarily provide accurate accounting of network costs.

+ Supports bilateral as well as trusted third party transactions
    Should allow simple peer-to-peer transactions.

+ Narrow, flexible deployment
    Facilitates migration to newer commerce policies.

+ Accurately accounts for network costs
    Facilitates rational consumption of resources and market
    efficiency.

+ Facilitates new provider recovery policies
    Should be lightweight, simple, and flexible.

+ Compatible with and leverages existing Internet technology
    Leverage PEM, MIME, and SNMP.  No reason to re-invent wheels and
    clutter Internet standards with redundant technology.

+ Decouples transport from higher-layer services
    Critical in order to scale and adapt to newer cost-recovery
    techniques.

+ Does not rely on ``electronic cash'' as exchange medium
    Primary advantage of electronic cash is anonymity, and cost is
    high complexity.  Anonymity can be achieved via authenticated
    vouchers and co-operatives.

+ Leverages extant syntactic conventions where relevant
    e.g., EDI -- UN/EDIFACT, ISO TCs and TAG7, etc.

This activity is of interest to anyone who would benefit by commerce
over the Internet.  Research into the requisite technology has been
ongoing for some time, and interest in this area is steadily growing.
Already several large corporations have either implemented or
announced their intentions to provide commercial higher-layer Internet
services.  Indeed, recent unilateral moves within the industry to
develop relevant technology strongly suggest that the time for action
in the IETF is now.  We expect standardization of Internet mercantile
infrastructure to be driven by the needs of Internet users -- folks
who want to buy things over the Internet, folks who want to sell
things over the Internet, and folks who stand to profit from the
ensuing growth of the Internet.